Hong Kong Stocks Advance on U.S., Chinese Economic Data

By Kana Nishizawa -
Feb 3, 2013

Hong Kongstocks rose for the first
time in three days as economic reports from the U.S. and China
showed signs of recovery in the world’s two largest economies. A
surge in trading of Ping An Insurance (Group) Co. shares lifted
volume on the city’s benchmark index.

Techtronic Industries Co. (669), a powertool maker that counts
the U.S. as its No. 1 market, rose 2.2 percent. Jiangxi Copper
Co., China’s biggest producer of the commodity, advanced 1.4
percent after the price of the metal increased. Ping An, China’s
second-largest insurer, slid 1.7 percent, with trading volume
more than 460 times its five-day average for the time of day.
HSBC Holdings Plc said regulators cleared a sale of its stake in
the insurer.

The Hang Seng Index (HSI) advanced 0.6 percent to 23,868.34 as of
10:34 a.m. in Hong Kong, headed for its highest close since
April 2011. All but eight stocks gained in the 50-member gauge,
with trading volume more than three times the 30-day average for
the time of day, according to data compiled by Bloomberg. The
Hang Seng China Enterprises Index of mainland companies climbed
0.6 percent to 12,287.55.

“The U.S. proved to the market the recovery is very
healthy,” said Lewis Wan, Hong Kong-based chief investment
officer at Pride Investments Group Ltd., which oversees about
$250 million. “It sent a very good sentiment to the Hong Kong
market. In China, the recovery is also very healthy. We expect
to see some profit taking in the coming few days just before the
long holiday because the market itself has been rallying.”

Hong Kong market will be shut for three days next week for
the Lunar New Year holidays, while markets in mainland China
will be closed for the whole week.

Winning Streak

The Hang Seng Index last month capped its fifth monthly
advance, the longest such streak since July 2009, after the U.S.
Federal Reserve embarked on a third round of quantitative easing
in September and as China’s economy showed signs of recovery.

The gauge traded at 11.5 times average estimated earnings
on Feb.1, compared with 13.7 for the Standard & Poor’s 500 Index
and 12.4 for the Stoxx Europe 600 Index, according to data
compiled by Bloomberg.

Futures on the S&P 500 gained 0.2 percent. The gauge jumped
1 percent on Feb. 1 after U.S. payrolls rose 157,000 in January
following a revised 196,000 advance in December and a 247,000
surge in November. Other reports showed manufacturing in the
U.S. expanded more than forecast last month, reaching a nine-
month high, while confidence among American households
unexpectedly rose.

China Economy

China’s services industries grew at the fastest pace since
August as gains in retailing and construction aid government
efforts to drive a recovery in the world’s second-biggest
economy. The non-manufacturingPurchasing Managers’ Index rose
to 56.2 in January from 56.1 in December, the Beijing-based
National Bureau of Statistics and China Federation of Logistics
& Purchasing said in a statement yesterday. A reading above 50
indicates expansion.

Futures on the Hang Seng Index rose 0.6 percent to 23,909.
The HSI Volatility Index (VHSI) increased 2.9 percent to 13.07,
indicating traders expect a swing of 3.7 percent for the equity
benchmark in the next 30 days.